You buy 50 shares of stock for $18.25 per share. One month later, the value of the stock is $18.98 per share. a. The value of the stock continues to i

ka1leE

ka1leE

Answered question

2021-01-08

You buy 50 shares of stock for $18.25 per share. One month later, the value of the stock is $18.98 per share.
a. The value of the stock continues to increase by the same dollar amount each month. How much will your investment be worth in 1 year?
b. The value of the stock continues to increase by the same percent each month. How much will your investment be worth in 1 year?

Answer & Explanation

jlo2niT

jlo2niT

Skilled2021-01-09Added 96 answers

a. The value of the stock increased by $18.98$18.25=$0.73. If the stock continues to increase $0.73 each month for the rest of the year, which is 11 months, then the value of the stock will increase by $0.7311=$8.03. The value of the stock at the end of the year will then be worth $18.25+$8.03=$26.28.
b. The value of the stock increased by 18.9818.2518.25=0.7318.25=0.04=4. The value of the stock after each month is then 104% of the value the previous month. At the end of the year, the value will have increased by 4% eleven times. The value of the stock at the end of the year will then be 18.25(1.04)11$28.10.

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